The Hidden Costs of Presenteeism: Causes and Solutions

Absent employees cost you money for sure, but what about sick employees that come to work? Find out how presenteeism could be costing you money and get tips for handling it.

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Move over absenteeism. It seems "presenteeism" has become the far worse workplace culprit in terms of causing loss to U.S. employers; that is, loss of employee productivity and loss of employer dollars. The bottom line: Presenteeism is costing employers more than absenteeism.

In case you're unfamiliar with the term, presenteeism was coined to define the practice of workers reporting to work when ill and not operating to their usual level of productivity. The total cost of presenteeism to US employers has been increasing, and estimates for current losses range from about $150 to $250 billion annually. Costs for presenteeism are about 60 percent of the total cost of worker illness.

People who come to work when sick are also likely to infect others; namely, coworkers and possibly customers or clients. In occupations such as nursing, and industries such as food service, an infected employee who comes to work ill can spell disaster -- compromising food safety, and infecting and sickening the public, to name a few.

In 2004, the Harvard Business Review reported on a study conducted by researchers at Tufts-New England Medical Center in Boston. The study assessed the impact of twenty-eight medical conditions on workers' productivity at Lockheed Martin Corp. The findings showed that employees who came to work sick that year -- with ailments such as allergies, headaches, lower-back pain, arthritis, colds and the flu -- set the company back about $34 million. Allergies and sinus trouble led the pack with the highest losses to the company of $1.8 million.

Causes of presenteeism

Today's workplace has changed from two or even one decade ago. Some of these changes have contributed to the growing incidence of presenteeism.

Increase in dual-earner and "sandwich generation" households

Dual-earner families now account for about two-thirds of all married couples, this up from one-third in 1970. With a greater percentage of individuals lacking a spouse at home to care for a sick child, a number of workers will go to work when ill in order to save their limited sick days for when their children are sick. Added to the mix are about one in ten workers, aged 30 to 60, who are now also caring for aging parents as well as their own children: these individuals called the "sandwich generation."

Employer expectations

In today's often "leaner-and-meaner" workplaces, some workers trudge off to work when sick because they fear one or more of the following: appearing less committed to their jobs, receiving disciplinary action, or even losing their jobs. A day or more off can also mean burdening coworkers with job duties, coming back to a heavy backlog of work responsibilities, or missing work deadlines.

Little or no paid sick days

The USDOL Bureau of Labor Statistics reports that in 2006, 57 percent of private industry workers overall had access to paid sick leave. And according to the Families and Work Institute, only 39% of low-wage employees are allowed any paid time off for personal illness. As a result, a number of workers are reporting to work when ill to avoid loss of pay.

Additionally, many more employers no longer allow employees to accrue sick days. It's more common today for workers to have a use-it-or-lose-it arrangement.

Employer solutions

Recognize the problem

The first step in solving a problem is often recognizing there is a problem in the first place. Presenteeism is often unrecognized by employers who may not realize the extent of loss it can cause. If you're a business owner, it's time to make managers aware of this problem and that the costs of presenteeism are rising. A business that ignores the problem of presenteeism is a business that may very well have it adversely affect its bottom line.

Rethink the use of disciplinary action to control absenteeism

According to the 2004 CCH Unscheduled Absence Survey conducted by Harris Interactive, disciplinary action remained the single-most used absence control program, with 91 percent of surveyed organizations reporting its use. Employers want their employees on the job and using as few sick days as possible, but CCH says employers that rely on disciplinary action to control absenteeism and abuse of sick time are unknowingly encouraging presenteeism.

Employers need to examine and ensure that absence control policies are not counterproductive. Programs such as disciplinary action may in fact pressure sick employees to report to work; this inadvertently encouraging presenteeism.

Develop a workplace policy on presenteeism and inform and educate employees

Employees need to know where your company stands on coming to work sick, and how doing so can infect others. Establish and communicate guidelines. Help employees understand under what conditions they should stay home, and when it's OK to return to work.

Keep facilities and common areas clean, and consider the use of posters to educate employees on how to avoid spreading germs; i.e., proper hand washing procedure for hand cleanliness.

In workplaces where the protection of the public is critical and essential to staying in business, employers may want to take disciplinary action or dismiss workers who are found in violation of company policy. One worker, for instance, went to work ill at a popular food chain establishment. As a result of doing so, this employee infected more than 400 customers whose symptoms included vomiting and uncontrollable diarrhea.

Many companies with presenteeism problems report that they also try to combat the issue by sending sick employees home. They strive to foster a culture that discourages employees from coming in sick; where employees are not made to feel that they must go to work even if they are ill. Where possible, employees are given the option to telecommute and work from home when not well.

Provide Paid Sick Leave and/or Paid Time Off to Workers

According to the National Partnership for Women & Families, our national economy would experience a net savings of $8.2 billion per year if workers were provided just seven paid sick days per year. This in addition to employers benefiting from reduced turnover, higher productivity and reducing the spread of contagion in the workplace.

Paid Time Off (PTO) programs are increasingly being offered by employers. In these programs, all time off is combined into a single bank of days. Employees have the flexibility to take these days in a way that will meet their individual needs.

In 2007, San Francisco became the first city in the country to require employers to provide their employees with paid sick leave. Only time will tell if other cities and states -- and eventually perhaps the federal government - will follow San Francisco's lead. Supporters of mandatory paid sick leave claim it benefits the employee, employer and the community. Detractors say mandatory paid sick leave places an unnecessary financial burden on small businesses and threaten their very survival.

Make an Effort to Boost Employee Morale

According to the CCH survey, morale had a significant impact on the incidence of presenteeism. They found that companies with low morale had more ill workers showing up for work. In their study, 52 percent or organizations with "poor/fair" morale reported presenteeism was a problem; this compared with just 31 percent of organizations with "good/very good" morale seeing presenteeism as an issue.

One way to boost morale is to provide some degree of flexibility in employees' work arrangements. Employers who do so help employees meet the pressing demands of both work and family, and aid in their achievement of a healthy work-life balance.

Offer a flu vaccination program

One way for employers to combat presenteeism is to pay for medical measures that can either prevent common illnesses or reduce existing symptoms. One such illness that can easily infect just about everyone in an office is influenza, aka "the flu," which is extremely contagious. Recovery from the flu can take three to seven days, or longer. After that, a persistent cough and tiredness can persist for weeks; this along with a persistent decrease in productivity.

Paying for employee flu shots or providing an onsite flu clinic is a definite cost-effective measure employers can take. Working adults who get a flu shot have 25 percent less upper respiratory infections. Reducing the number of employees who contract and spread the flu is a win-win scenario for all: increased productivity and workplace morale, and a healthier bottom line.

The image of an employee who comes to work sick-as-a-dog as a dedicated and valued worker is no longer apropos. Presenteeism costs are a real and potentially significant drain on a company's financial well-being. Employers need to make a concerted effort to develop a workplace with healthy and highly functioning workers. This will go a long way toward meeting goals for company productivity and profits, and fostering a healthy work culture and environment for employees.

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